Dr. Ian Davis, Stockholm International Peace Research Institute (SIPRI)
This article first appeared on the SIPRI website on 25 September 2015. It is reproduced here with the kind permission of SIPRI
One way for the public and parliamentarians to really understand what is happening in any organization is to follow the money. So where would you go to find information on NATO's annual budget? Perhaps you thought that something as basic as this would be accessible via the NATO website? It isn’t. In fact, NATO does not publish an annual financial report on its revenue and expenditure, even though other intergovernmental bodies, such as the EU and World Bank, routinely do this.
The 28th September is international ‘Right to Know Day’ – an event first celebrated by access to information advocates from around the globe in 2002. This annual occasion aims to raise awareness of every individual's right of access to government-held information: the right to know how elected officials are exercising power and how tax payers' money is being spent. The public’s right to know is the most effective and inexpensive way to stop corruption and waste, and enhance efficiency and good governance.
The number of countries with freedom of information laws or similar administrative regulations stands at about 93. Sweden, for example, will be celebrating next year the 250th anniversary of the passage of its right to know legislation in 1766. Within intergovernmental institutions the picture is less encouraging, although some do have an administrative framework for facilitating public information requests, including the Organisation of American States (Model Inter-American Law on Access to Information), the African Commission on Human and Peoples’ Rights (Model Law on Access to Information for Africa), the Council of Europe (Convention on Access to Official Documents), the European Union (Regulation 1049: Access to European Parliament, Council and Commission documents) and the World Bank (The World Bank Policy on Disclosure of Information).
The scale and importance of the NATO security apparatus demands that it ought to be subject to close scrutiny. But without a publicly available annual budget it is often impossible to grasp the significance of what is being proposed or implemented within the Alliance. Moreover, NATO does not even have a basic information disclosure policy. This state of affairs led the national audit office in one of the member states (the Netherlands) to set up a website in 2014 devoted to increasing transparency and accountability in NATO
The NATO budgetary process
The costs of running NATO and implementing its policies and activities are officially met in two ways: contributions to a common funding pool and participation in NATO-led operations. As regards the officially recognised budgetary process, member states make direct contributions to the NATO common funding pool in accordance with an agreed cost-sharing formula based on relative gross national Income. There are three budgets within the common funding arrangements: a civil budget, a military budget and the Security Investment Programme, which pays for NATO installations and facilities.
While the NATO website does provide some background on the process the actual budget amounts and respective member state contributions are not given. A 2012 US Congressional Research Service (CRS) report shows that in 2010, the US financial contribution to these three budgets was $84.1 million, $430 million and $197 million respectively – or about 25% of the total common NATO budget. From these figures, we can guesstimate that the NATO annual budget is about €2.5 billion. Of course, these direct contributions to NATO represent a very small percentage of each member’s overall defence budget.
It is in contributing to NATO-led operations where the serious money begins to get spent, since member countries incur all their own deployment costs whenever they volunteer forces for such operations. With a few exceptions, it is nationally procured military forces and military assets such as ships, submarines, aircraft, tanks, artillery or weapon systems that are or have been deployed in NATO missions in Kosovo, Afghanistan and Libya. However, information as to how the costs stack up for each of these missions is in short supply, although the USA is the largest contributor to the first two.
According to SIPRI data, for example, the common costs for the NATO-led International Security Assistance Force (ISAF) in Afghanistanreached around €409 million in 2010 or about 16 per cent of the NATO annual budget. This is not an insignificant sum, and unlikely to be much lower than some of the national contributions from some medium-level European member states, although it is a very small proportion of the total mission costs, with US costs alone in the tens of billions of dollars.
Modest steps towards greater transparency….. more work needed
In 2014 NATO took a modest step towards more transparency by disclosing individual audit reports of NATO entities and their related financial statements. Moreover, the 2014 NATO Wales Summit Declaration commits the Alliance to ‘further work in the areas of delivery of common funded capabilities, reform governance and transparency and accountability, especially in the management of NATO’s financial resources’. Since then NATO has made public a number of additional documents covering internal financial regulations and accounting principles for the Alliance, including in June this year an independent audit report on the NATO Security Investment Programme. That the auditors revealed significant shortcomings in accountability and management within the Programme, (which NATO has said it will address) suggests that there is real value in the Alliance continuing much further along this path.
Overall, NATO continues to fall well short in disclosing documents needed for accountability (with the exception of the Annual Report of the Secretary General) and is still one of the more inflexible western organizations in the area of transparency. To allow parliamentarians and the general public to construct more informed perceptions about its current activities, NATO (and member states) could consider five measures:
- Sharpening national parliaments’ scrutiny of NATO affairs, either by existing parliamentary committees (such as the defence and/or intelligence committees) holding regular annual sessions on NATO-related issues or by establishing permanent standing parliamentary committees dedicated to NATO, which would have the power to call NATO officials to appear as witnesses;
- Strengthening the democratic mandate of the NATO Parliamentary Assembly, with greater accountability and openness about how members are selected a particular priority. At a minimum, Assembly representatives should be on fixed term appointments and subject to some form of intra-parliamentary election process (similar to that which was introduced in the UK for select committee chairs). With a strengthened democratic mandate the Assembly might then adopt a stronger role of scrutinising activities within NATO and have privileged access to sensitive internal documents;
- Adopting an information openness policy within NATO consistent with the access to information laws already in place in the Alliance's 28 member countries—such a policy should include guidelines for proactive publication of core information, a mechanism for the public to file requests for information, and an independent review body for hearing appeals against refusals or failures to make information public within a short time-frame;
- Publishing annual financial reports showing figures on NATO revenue and expenditure; and
- Using the existing NATO TV channel and YouTube presence to stream more policy dialogues, including some internal NATO meetings, to the public.
While most NATO member states are happy with the present arrangement, which gives them the discretion to decide (and veto) what is released and when (if at all), such historically-embedded secrecy practices make it extremely difficult for parliamentarians and citizens to find out the considerations underpinning NATO decisions. To effectively exercise their democratic rights citizens need to be able to scrutinise more of the information that has formed the basis of a particular decision within NATO.
Dr Ian Davis is SIPRI's Director of Publications. He blogs on NATO-related issues at www.natowatch.org and has been following transparency and accountability issues in multilateral security organizations, especially NATO, for over twenty years.